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Mine Subsidence Insurance
Mine subsidence is caused by the collapse or lateral or vertical
movement of structures resulting from the caving in of underground
mines. Mine subsidence insurance has been available in Ohio since
October 1987. It is administered by the Ohio FAIR Plan, which is
under contract to provide administrative and claims handling services
for the Ohio Mine Subsidence Insurance Governing Board. Insurance
companies that offer basic or multi-peril property insurance within
the 37 eligible Ohio counties are required to become members of
the Ohio Mine Subsidence Insurance Underwriting Association and
offer this coverage to all eligible applicants.
Mine subsidence legislation
Legislation passed in 1992 established mandatory and optional counties
in regard to the purchase of mine subsidence insurance coverage.
Currently, property insurance policyholders (owners of homes, farms,
mobile homes or dwelling fire policies) in 26 counties are required
to obtain mine subsidence coverage when purchasing or renewing their
homeowners insurance.
The counties included in this mandatory coverage area are Athens,
Belmont, Carroll, Columbiana, Coshocton, Gallia, Guernsey, Harrison,
Hocking, Holmes, Jackson, Jefferson, Lawrence, Mahoning, Meigs,
Monroe, Morgan, Muskingum, Noble, Perry, Scioto, Stark, Trumbull,
Tuscarawas, Vinton and Washington. In these 26 counties, there are
about 666,000 properties eligible for mine subsidence coverage.
This legislation also provides that the mandatory mine subsidence
coverage premium will not exceed $5. The Mine Subsidence Board of
Governors voted in premium decreases in 1999. The annual premium
for mine subsidence coverage for home owners in mandatory counties
is currently $1.00. It was previously set at $3.00.
The statute also provides that 11 counties are eligible for “optional”
mine subsidence coverage, with the annual premium not to exceed
$20. The annual premium in optional counties was also lowered in
1999 from $12.00 to the current annual premium of $5.00. Counties
designated for optional coverage are: Delaware, Erie, Geauga, Lake,
Licking, Medina, Ottawa, Portage, Preble, Summit and Wayne.
Home owners in optional counties are offered mine subsidence insurance
when purchasing or renewing their policies, although its purchase
is not required. The chart on the facing page shows the specific
location of each of the mandatory and optional counties.
Coverage and eligibility
It’s important to note that standard homeowners insurance
policies do not automatically cover damage due to mine subsidence.
Under mine subsidence insurance, coverage is equal to the amount
of insurance on the dwelling or $50,000, whichever is less. A deductible
of 2% of the coverage available applies, with a $250 minimum and
$500 maximum.
Mine subsidence insurance coverage is available for 1–4 family
dwellings. It covers the cost of excavation or grading, boilers
or engines below the undersurface of the lowest basement floor (or
where there is no basement below the surface of the ground), and
underground pilings, piers, pipes, flues and drains and/or pilings
below the watermark.
Coverage does not extend to industrial/commercial buildings, dwelling
buildings that are commercially rated, outbuildings, barns, land,
trees, crops, plants or contents. Vacant buildings or those that
have less than 50% occupancy for 60 days are also excluded.
Mine subsidence statistics
In 2000, the Ohio Mine Subsidence Insurance Underwriting Association
issued 626,471 policies, which is 53.2% of the properties eligible
for coverage in both mandatory and optional counties. There were
595,232 policies in force in 1999, which was 50.5% of the eligible
properties. Claims paid in 2000 totaled $284,574 and in 1999 totaled
$186,944. Claim payments include loss adjustment expenses. 141 claims
were closed in 2000, compared to 109 in 1999. Reserves at year-end
2000 totaled $94,500 and $286,700 in 1999.
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According to the 2000 US Census, the
percentage of Americans that said when their homes were built
(by decade):
1990–2000 16.5%
1980–1989 15.7%
1970–1979 18.3%
1960–1969 13.3%
1950–1959 12.7%
1940–1949 7.3%
1939 or earlier 16.2%
(USA Today, 8/16/01)
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